TORONTO - The Canadian dollar closed lower Monday as traders considered a potential merger and acquisition deal involving iconic restaurant chain Tim Hortons and looked ahead to the latest reading on economic growth.

The loonie was down 0.3 of a cent to 91.07 cents US.

Burger King is in merger talks with Tim Hortons in hopes of creating a new, publicly traded company with its headquarters in Canada. With a new base in Canada, Burger King, now based in Miami, could shave its U.S. tax bill. Tax inversions have become increasingly popular among U.S. companies trying to cut costs. The majority owner of Burger King, 3G Capital, would own the majority of shares of the new company.

It's not known what such a deal would be worth but, depending on the structure, it could have an impact on the dollar. Tim Hortons has a market capitalization of $9.5 billion and the loonie has been pushed higher in the past by big corporate deals.

That's because a foreign buyer acquiring a Canadian company will need Canadian currency to close the deal, boosting demand for the loonie on financial markets.

Meanwhile, Statistics Canada releases the June reading on gross domestic product growth on Friday. Economists expect that Statistics Canada will report that GDP grew by 0.2 per cent in June, which would translate into annualized growth of 2.6 per cent.

In the U.S., the durable goods report for July is out Tuesday and economists looked for a gain of seven per cent, reflecting a strong pickup in aircraft orders. Excluding transportation, durable goods orders were expected to rise by 0.4 per cent.

Elsewhere on currency markets, the euro traded at an 11-month low (1.3201 against the greenback) after European Central Bank president Mario Draghi said that medium-term inflation expectations had declined. Draghi told the Federal Reserveâ€™s economic symposium on Friday that the bank is considering asset purchases to pump more money into Europeâ€™s economy, though he gave no guidance on when that would happen.

On the commodity markets, October crude in New York dipped 30 cents to US$93.35 a barrel.

December gold fell $1.30 to US$1,278.90 an ounce, while September copper was up one cent to US$3.22 a pound.

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